2 days Ago By Alexander Wong
In the past week, U Mobile has been in the spotlight after it was picked to roll out Malaysia’s second 5G network by the Malaysian Communications and Multimedia Commission (MCMC). Following public criticism of the selection, U Mobile Chairman Tan Sri Vincent Tan has issued a statement on The Star which addresses several concerns including its commitment to build the network, its foreign shareholding and why Malaysia needs to abolish the 5G monopoly created during the Muhyiddin administration. According to the tycoon who launched U Mobile in 2007, U Mobile is an innovation-led telco launched without using taxpayers’ money.
He said over RM5 billion private sector money has been invested and they have reached 9 million subscribers at the end of 2023. At the moment, the orange telco has over 10,000 network sites and employed over 1,000 dedicated Malaysian employees nationwide. He added that U Mobile has achieved 95% population coverage putting it on par with CelcomDigi and Maxis.
He said U Mobile has consistently succeeded in government JENDELA initiatives and the Universal Service Provision (USP) programmes to narrow the digital device. The orange telco has offered connectivity plans from RM15 per month and free connectivity was also provided. In terms of financials, Vincent Tan shared that U Mobile recorded a higher revenue of RM3.
5 billion and a higher net profit of RM102 million, with increased operating cash flows of RM1.2 billion in 2023. He added that U Mobile’s total assets stood at RM6.
2 billion, with a total share capital of RM2.6 billion. Despite being the youngest telco among the second 5G network bidders, Vincent Tan said U Mobile is the first telco in Malaysia to offer 5G services at no additional cost for all Malaysians, and has consistently offered similar services at 20-25% cheaper than its competitors.
He added that U Mobile’s aggressive investments and innovations have and will continue to challenge its competitors resulting in cheaper and better services for all Malaysians. Touching on the foreign shareholding where Singapore’s Straits Mobile Investment Pte Ltd currently owns 48.3% of the telco, Vincent Tan said foreign ownership is common in Malaysia and globally.
He gave an example whereby CelcomDigi is 33% owned by Norway-based Telenor. He said as soon as the second 5G network award was announced, U Mobile confirmed that Straits Mobile Investment Pte Ltd has agreed to reduce its foreign majority shareholding to 20% to ensure Malaysians have solid control of the telco. The statement also clarified that the early shareholders of U Mobile included its founder and chairman – Tan Sri Vincent Tan (since 2007) and Singapore’s Straits Mobile Investment Pte Ltd (since 2010).
His Majesty Sultan Ibrahim of Johor has been an investor in U Mobile since 2015, almost a decade before His Majesty was sworn in as the Yang di-Pertuan Agong. Vincent Tan said while he encourages healthy public discourse, any comments involving His Majesty Yang di-Pertuan Agong should be done responsibly based on facts and not wild accusations. He added that U Mobile has been and will always be open to engaging with the public in a constructive and transparent manner, and the telco owes its success to the unwavering and growing public support.
Vincent Tan who founded both Digi (in the 1990s) and U Mobile, have voiced out his criticism of Malaysia’s Single Wholesale Network (SWN) implemented during Muhyddin’s administration. In the statement, he said despite telcos’ willingness to fund the 5G rollout without taxpayers’ money, Muhyiddin’s administration’s insistence on the monopoly of the 5G network through the Ministry of Finance-owned Digital Nasional Berhad has put taxpayers’ money at risk. He explained that DNB has spent RM4 billion to date and RM12.
5 billion have been planned through various contracts by DNB across a period of 10 years. In total, he alleged that RM16.5 billion of taxpayers’ money is at stake.
He iterated that the monopolistic single network model chosen by the Muhyiddin administration was against the best practices in the world and has failed in other countries. Vincent Tan said while it is a waste of resources if all major telcos were to rollout to build their own separate 5G networks, he said it is definitely risky to have just one 5G network for the entire nation. Therefore, it is critical for Malaysia’s digital resiliency to have two nationwide, modern 5G networks that provide connectivity and redundancy.
He added that competition leads to improvements and innovations, and both 5G networks can compete and coexist to provide the best services with guaranteed affordability to consumers, enterprises and government. The tycoon thanked the government for making the courageous decision to break DNB’s monopoly by allowing the second 5G network. He also highlighted that U Mobile has selected after a thorough tender process conducted by the MCMC through a beauty contest that was participated by all telcos.
Vincent Tan also emphasised that there’s no multi-billion contract involving taxpayers’ money for the second 5G network. He stressed that U Mobile will fully fund the entire rollout of the new 5G network without a single sen from taxpayers’ money, which is a vast difference from the Muhyiddin administration’s monopoly model which was funded by taxpayers and has put taxpayers’ money at risk. The MCMC announced U Mobile as the winner of Malaysia’s second 5G network tender on 1st November 2024 after the regulator released its Application Information Package (AIP) on 1st July 2024.
The decision came as a surprise as CelcomDigi and Maxis were seen as forerunners in the second 5G network race since the two major telcos have more sites, subscribers and revenue. Former MP Ong Kian Ming has recently asked the MCMC to disclose the “scoring method” for picking U Mobile as the winner for the second 5G network bid..
